Bulls mine more profits in $VALE

Vale (VALE) has been rallying in recent weeks, returning more big profits on upside option positions.

Back on Jul. 27, Market Rebellion’s Unusual Activity Service flagged the purchase of 29,940 December $14 calls for $0.50 to $0.53 as part of a bullish roll with shares at $11.66. Volume was above the strike’s previous open interest of 750 contracts, indicating that this was fresh buying.

Those calls traded for as much as $2.30 today, over 4 times their purchase prices. The stock rose 39.45% in the same time frame, illustrating the kind of leverage that can be achieved with options.

This marks the second winning trade in the name to be posted on Market Rebellion in the past week.

Long calls lock in the price where a stock can be purchased, gaining with a rally and providing leverage to the underlying shares. The contracts can quickly lose value if the stock stalls or pulls back but also carry less risk than owning the shares themselves.

VALE closed up by 1.37% at $16.28 today. The miner is up sharply this past month, making a new 52-Week high this session.